Increase In Lending To SMEs
According to UK Finance’s figures, the amount lent on a gross basis to Small and Medium-Sized Enterprises (SMEs) in the 9 months to 30th September 2020 amounted to £54 billion. Apparently that was more than twice the amount that was lent to SMEs here in the UK throughout the whole of 2019.
Obviously, the coronavirus pandemic has had a significant impact on the amount borrowed by SMEs due in part to the support provided by the government with various lending schemes. There has also been a lot of financial support provided by the likes of banks to SMEs. A significant number of these businesses have been supported by the finance sector by way of capital repayment holidays on business loans and having their overdraft facilities extended. Having said that, there was a reduction in overdrafts being used to 39% in the third quarter of 2020 whereas in the first quarter of 2020 it was 54%.
Apparently, during the first 9 months of 2020, in excess of £68 billion was lent to more than one and a half million businesses in the UK by way of borrowing that was guaranteed by the government.
It will be interesting to see what, if any, further financial support the government can offer ailing businesses in the coming months and possibly years as no one knows for certain what the future holds. For instance, could we see another lockdown here in the UK due to COVID-19 – if so, this could have a devastating affect on many more businesses.
There will no doubt be many businesses that have been unable to survive the impact of the pandemic so it is to be hoped that such businesses receive a sympathetic ear from lenders when it comes, for instance, to discussing the potential repayment of any debt.
We will continue to keep our readers updated with any relevant lending statistics related to the business sector here in the UK.